The present invention is generally directed to the electronic transfer of funds and, more particularly, directed to methods and systems for transferring funds using an existing independent or third party host system to effect the funds transfer.
The concept of transferring funds or xe2x80x9cwiring moneyxe2x80x9d has been practiced for over a century. At today""s speed of society, there is a greater and greater need for transferring funds rapidly from one individual to another. Wiring money is particularly useful for individuals that are known as xe2x80x9cunbanked,xe2x80x9d which means unaffiliated with a financial institution. Migrant workers or foreign nationals, for example, are often unbanked and frequently use wire transfers to send money to other states or other countries for a variety of reasons. For example, these individuals rely on money transfers to help support their families or provide medical or other expenses to those located elsewhere. There are several conventional methods of transferring or wiring money, the most common being a transfer service by Western Union(copyright).
To send money via Western Union(copyright), a customer must travel to a Western Union(copyright) office or agent location and present cash or equivalent funds in the amount to be transferred plus a service fee. The sender is required to fill out a detailed transfer request form for each transaction, which is then automatically or manually entered into the Western Union(copyright) system. This is a very labored-intensive and time-consuming operation, particularly if the sender makes frequent transfers.
Another system of transferring funds allows customers of a particular financial institution to transfer and receive funds between other account holders electronically. However, this system requires that the individuals have accounts at the financial institution or affiliated institutions, and therefore ignores the large number of unbanked customers that wish to transfer funds.
Yet another system of transferring funds is disclosed in U.S. Pat. No. 5,650,604, which discloses a system and method for transferring funds using automated teller machines (xe2x80x9cATMxe2x80x9d) such that the identity of the sender and recipient can be maintained in secret. While the system and methods disclosed in the ""604 patent provide convenience to those individuals who wish to keep their identities private, the ""604 patent is disadvantageous in at least two respects. First, the ""604 patent goes too far in trying to maintain the confidentiality and privacy of the sender and recipient. In particular, neither the sender nor recipient is required to disclose any personal information for identification purposes. Thus, if transfer information such as a transaction code or personal identification number (PIN) is intercepted, the transferred funds could be easily stolen. Second, the ""604 patent discloses a closed system for transferring funds, which is less convenient for the sender because the sender must locate or access the system of the ""604 patent as a separate and distinct operation. Therefore, it is desirable to provide a system and method of transferring funds that is more convenient to the sender and recipient, yet provide security measures in order to prevent theft or interception of the transferred funds.
In view of the above problems associated with conventional systems and methods, the present invention provides methods and systems for transferring funds that provide convenient accessibility for the sender while also providing a high level of security on the distribution end of the transaction. Advantageously, the system and methods of the present invention utilize an existing third party host system, such as a conventional checkout system at a hardware store or grocery store, so that the sender can transfer funds in conjunction with the purchase of unrelated goods and/or services. The system includes a transfer card that is encoded with, according to one embodiment, personal information about the sender and recipient so that this information need only be entered before the first transaction and is thereafter stored permanently by the transfer card. The transfer card is readable by a device of the independent or third party host system, such as a bar code scanner or a magnetic stripe reader, and money to be sent to the receiver is collected by the independent host system along with the money that purchases the unrelated goods and/or services. Thus, the sender is not required to seek out an ATM or stand-alone device when desiring to transfer funds, and compared to conventional systems and methods, the funds transfer of the present invention is performed more quickly and conveniently.
More specifically, a method of transferring funds according to one embodiment of the present invention comprises sending a transfer request from an independent host system to a central processing center, wherein the transfer request includes transfer information, such as personal information of the sender and/or receiver as well as an amount to be transferred. The central processing center responds with a status response, which indicates whether the transfer may proceed. If the transfer proceeds, cash is preferably received by the independent host and the funds are made available for transfer to the receiver. A transaction code is generated by the central processing center and provided to the sender, who in turn communicates the code to the receiver. The receiver obtains the transferred funds by presenting transfer information and personal identification to a distribution center. The distribution center receives the transfer information and personal identification of the receiver and compares this information with the transfer information received from the sender. If the information matches, the central processing center sends an authorization to the distribution center to distribute the funds to the receiver.
The transfer request preferably utilizes existing point-of-sale devices at the independent host system, such as a conventional checkout system employing bar code scanners and magnetic stripe (credit card) readers. In this regard, the present invention includes a transfer card having, according to one embodiment, a bar code and a magnetic stripe that includes information at least about the sender, and preferably includes information about the receiver as well. Thus, the transfer card can be used for an endless number of transfers, which speeds transactions and lowers costs.
The receiver preferably is required to present some kind of personal information to the distribution center, such as by showing a drivers license or picture identification to a teller or other personnel of the bank. The transaction code is also presented by the receiver, and the code and personal identity of the receiver are confirmed. This can be done by the central processing center or by the distribution center, and preferably the personal identity of the receiver is verified by the distribution center while the transaction code is confirmed at least by the central processing center.
For unbanked and banked consumers, the ability to transfer funds to people in remote locations while shopping and purchasing items at independent retail locations is a great advance in the art of transferring funds in terms of convenience and customer satisfaction. The systems and methods of the present invention provide more convenience to the sender by utilizing existing third party host locations and eliminating repetitive transfer forms. In addition, the systems and methods of the present invention provide security and convenience on the receiving end of the transfer, which provides more peace of mind to the sender and receiver.